The cannabis technology company saw its revenue increase by 73% over the same quarter a year ago, largely thanks to its online cannabis store CannMart.com
() () reported record revenue of C$6.9 million in its second quarter, according to financial results released Friday.
During the period ended May 31, 2020, the cannabis technology company saw its revenue increase by 73% over the same quarter a year ago, a 31% sequential increase, largely thanks to its online cannabis store CannMart.com, which generated net revenue of $2.4 million.
Toronto-based Namaste also narrowed its net loss significantly to $4.8 million compared to $8.6 million in the year-ago quarter, which was attributed to CannMart's introduction of new distribution channels, restructuring efforts in 2019, and resulting business improvements in 2020.
READ: Namaste says subsidiary CannMart granted exclusive license by IGNITE to utilize certain brand trademarks on cannabis products
"The introduction of B2B distribution channels by CannMart has made a significant contribution to Namaste's revenue stream and bottom line," Meni Morim, CEO of Namaste said in the results statement.
"For the second consecutive quarter, we have seen considerable revenue growth and have just recorded the highest quarterly revenue for the company to date. As stated in the first quarter, the strategic decisions we made in 2019 and early 2020 are beginning to be reflected in our results.”
CannMart sales strong
CannMart's revenue increased by 82% on a sequential basis from 1Q to 2Q 2020 and over 33% of Namaste's second-quarter 2020 revenue was derived from cannabis and cannabis products compared to under 5% for the same period in 2019.
Nearly half, or 48%, of 2Q net revenue came from Canadian clients compared to 19% from the same period in 2019, a 338% increase in quarter over quarter revenue. Namaste told shareholders that the sharp increase reflected efforts made to focus on growing its market share within the Canadian market.
The company signed a number of agreements with international cannabis brands to expand CannMart’s product catalogue and received approval from both Alberta and Ontario regulators to begin offering Cannabis 2.0 products.
Morim pointed out that the firm’s efforts have resulted in “significant growth” for cannabis and cannabis products sales in Canada, but there is more work ahead for the group, he added. “We have shown that we can grow our revenue and as we expand our product lines, improve operational efficiencies, and increase our gross margins in coming quarters to coincide with revenue growth."
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